The figure is lower than HSBC’s earlier growth forecast of 5.6 per cent. This is just a sequential change given the surprise slowdown in the first quarter (Q1) this year to 5.4 per cent compared to the 5.9 per cent last year, HSBC ASEAN economist Aris Dacanay said.
The Q1 2025 figure is, however, higher than the 5.3-per cent growth in Q4 2024. Full year growth last year was 5.6 per cent.
In a briefing, Dacanay said explained that the latest tariff policies of the US pose a risk to domestic growth as it leads to uncertainties among investors, affects foreign direct investment and results in lower imports from the United States.
These are, however, countered by the easing rate cycle of the central bank, robust domestic consumption, improvement in credit growth, import of capital and lower inflation, partly because the country does not compete with China in exports to the United States, he was cited as saying by a domestic news agency.
Without ruling out a slowdown, Dacanay said drivers are seen to keep the economy afloat and even bolster it to 5.6 per cent next year.
For Q2 2025, growth is projected to accelerate to 5.6 per cent due to improvements in consumption, investments, service exports, debt servicing and front-loading of exports due to expected increase in tariffs, as well as policy rate decisions by the central bank.
ALCHEMPro News Desk (DS)
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